HOW MANY INNOCENT PEOPLE WILL BE MURDERED BY BLACKS TODAY?..........THE LOOTING ACROSS AMERICA is as black as the staggering murder and crime rates of BLACKS ACROSS AMERICA. Black Lives Matter? NO LIFE MATTERS TO BLACKS!

Saturday, February 26, 2011

Authorities have responded to the anonymous campaign calling for pro-democracy demonstrations across China with detention of human rights activists, greater Internet censorship and pressure on foreign journalists

By David Pierson

Los Angeles Times

5:52 AM PST, February 26, 2011

Reporting from Beijing

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An anonymous online campaign calling for pro-democracy demonstrations across China on Sunday has been met with the detention of human rights activists, greater Internet censorship and even veiled pressure on foreign journalists.

The strict response by authorities comes after a U.S.-based Chinese-language website, Boxun.com, called for repeated attempts each Sunday to launch a "jasmine revolution" in about two dozen cities, including Beijing and Shanghai.

The first planned attempt, which was held last Sunday, brought out a swarm of police and foreign media in some of the designated sites but provided no evidence the country was on the cusp of a popular uprising.

Still, with regimes toppling in North Africa and the Middle East, authorities in China deemed the threat strong enough to have interrogated, arrested and detained at home dozens of people suspected of fomenting the anti-government movement.

Human rights groups based outside China said Friday that police had charged five activists this week with "subversion of state power" and "inciting subversion of state power," serious crimes that carry potentially decade-long prison sentences.

The five were Ran Yunfei, 46, a widely followed blogger and public intellectual; Ding Mao, 45, a student leader during the 1989 Tiananmen democracy protests who spent 10 years in jail; Hua Chunhui, 47, an insurance company manager who has advocated on civil society issues; Liang Haiyi, no age given, a woman accused of posting foreign links about the jasmine revolution on a popular Chinese instant-messaging service; and Chen Wei, 42, a leading human rights activist in central Sichaun province.

The arrests coincide with the disappearance this month of three human rights lawyers, Jiang Tianyong, Tang Jitian and Teng Biao.

"The numbers point to a bad situation that is only getting worse," Renee Xia, international director of Chinese Human Rights Defenders, an advocacy group, said in a written statement. "In the matter of a few days, we have seen more cases of prominent lawyers subjected to prolonged disappearances, more criminal charges that may carry lengthy prison sentences for activists, more home raids, and a heavier reliance on extralegal measures."

Supporters of the jasmine revolution have been communicating on Twitter, a site only accessible in China with circumvention software since it was blocked by Web censors in 2009. Many cautioned those who planned to attend demonstrations Sunday to be wary of police.

Authorities appear to have gone to extraordinary lengths to prevent a repeat of the Feb. 20 gathering outside a McDonalds in a busy Beijing shopping district. Metal corrugated fencing was erected outside the restaurant midweek, blocking the protest site. The same tactic was employed outside the home of Liu Xia, who is married to Nobel Peace Prize laureate Liu Xiaobo.

On Friday, several members of Beijing's foreign media corps were telephoned by police and told they needed to apply with neighborhood councils to receive permission to conduct interviews.

The same level of sensitivity is being levied on the Internet, where even the Beijing neighborhood in which the protest is supposed to take place -- Wangfujing -- is banned from being searched on China's most popular micro-blogging site, Sina Weibo.

That puts the popular tourist destination on a list of banned search terms that has expanded to include "Egypt," "jasmine" and American ambassador Jon Huntsman, who sparked a controversy by briefly being seen at last Sunday's gathering.

The social-networking site LinkedIn was also blocked by censors from late Thursday to Friday evening. It had reportedly carried messages about the protests.

THE BANKSTERS HAVE UNLEASHED A PROPAGANDA MACHINE TO CONVINCE AMERICANS THEIR RAPE AND PILLAGE WAS AN ACT OF GOD… OR OF NATURE… BUT IT WAS A CONCERTED ACT BY WALL ST. BANKSTERS AND THE POLITICIANS THEY BOUGHT!

NO ONE HAS TAKEN MORE LOOT FROM BANKSTERS THAN BARACK OBAMA! AND THEY’VE DONE WELL BY HIM!

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CANADIAN BANKS vs AMERICAN BANKSTER PILLAGERS…

DURING THE GOLDEN MONTHS OF BANKSTERS’ RAPE, PILLAGE, BAILOUT & BONUSES and no REAL REGULATION of the BANKSTER PRESIDENT, BARACK OBAMA

When the American banksters realized that their days of looting would slow without a huge government bailout, they bought all the politicians they could, including BARACK OBAMA, and OBAMA DONOR, BUSH WAR PROFITEER, Sen. Dianne Feinstein.

Feinstein, one of the most self-serving and corrupt politicians of all time, has long fronted for the BANKSTERS’ INTERESTS, and has taken big loot from banksters WELLS FARGO and BANK of AMERICA, both global criminal operations. When the banksters wanted to FIX the system even more, they instructed Feinstein to shove their “BANKSTERS’ BANKRUPTCY REFORM” through Congress. (Remember now that the huge SAVINGS & LOAN DEBACLE of the 1980’s there were only two (2) U.S. senators that had not taken bribes from this corrupt sector and has in all massive corporate rapes, the BUSH FAMILY was right in the thick of it! We will not be finished paying off the SAVINGS & LOAN DEBACLE until 2012! That debacle was miniscule compared to the MASSIVE RAPE BY BANKSTERS OF TODAY… ON GOING TO THIS MINUTE) The FEINSTEIN BANKSTERS’ “REFORM”, which the bankster wrote for themselves, as they have OBAMA’S NO REAL REGULATION, made it impossible for victims of banksters’ mortgage fraud to go into OPEN COURT and have their mortgage revised.

BESIDES FEINSTEIN, AND HER SENATE PARTNER-IN-CRIME, BARBARA BOXER, WERE CLINTON, BIDDEN, AND OF COURSE THE BANKSTERS’ BOUGHT BOYS, now heading up “regulation” CHRIS DODD, AND BARNEY FRANK voting for the FEINSTEIN BANKSTER REFORM! OBAMA did NOT vote for this corrupt bit of legislature, and pre-election, promised he would restore consumers’ rights, but alas, as in all things relating not to BANKSTERS’ INTERESTS, or HISPANDERING TO ILLEGALS, Obama went limp, and pushed through all the no-strings, no conditions bailouts his bankster donors demanded!

CRIMINAL BANKSTERS WELLS FARGO and BANK of AMERICA are two of Feinstein’s largest donors! EVEN AT THE TIME FEINSTEIN WAS PUSHING FOR WELLS FARGO’S INTERESTS, THAT BANK ALREADY HAD THEIR CALIFORNIA MORTGAGE LICENSE REVOKED, AS IT IS TO THIS DAY! REVOKED FOR THE VERY CORRUPT BANK PRACTICES WELLS FARGO WENT ON TO EXPLOIT BILLIONS OF DOLLARS OF MORTGAGES ON AROUND THE NATION!

WELLS FARGO HAS ALSO BEEN CAUGHT AS BANKSTERS TO THE MEX CARTELS, OPENING BANK ACCOUNTS FOR ILLEGALS, HANDING MORTGAGES TO ILLEGALS WITH FRAUDULENT DOCS, AND I.D’.s…. NO WONDER WELLS FARGO (AS IS BANK of AMERICA) GENEROUS DONORS TO LA RAZA – THE MEX FASCIST PARTY!

DIANNE FEINSTEIN, ALSO ENDORSED BY LA RAZA, IS AN ADVOCATE FOR OPEN BORDERS, NO E-VERIFY, NO I.C.E. ENFORCEMENT, NO ENGLISH ONLY, AND OPEN BORDERS. FEINSTEIN, LIKE HER COLLEAGUE, NANCY PELOSI, HIRES ILLEGALS AT HER S.F. HOTEL, JUST MILES FROM HER $16 MILLION DOLLAR WAR PROFITEERING MANSION.

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“Wells Fargo said last month that first-quarter profit jumped 53 percent from a year earlier as borrowers rushed to refinance mortgages amid record-low interest rates.”

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Lou Dobbs Tonight

Monday, November 12, 2007

Mortgage giants Wells Fargo and Bank of America are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these

companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners.

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Few foreclosures, no bank failures: Canada offers lessons

Kevin G. Hall
McClatchy Newspapers

last updated: January 11, 2011 04:31:22 PM

TORONTO — Maybe Canada has something to teach the U.S. about housing finance.

One in 4 U.S. homes is thought to be worth less that the mortgage being paid on it. One in every 492 U.S. homes received a foreclosure notice in November. For the fourth year running, analysts are speculating on where the bottom is for U.S. real estate.

No such worries up here in Canada — yet its system of mortgage finance gets little attention in the U.S.

Not a single Canadian bank failed during the Great Depression, and not a single one failed during the recent U.S. crisis now dubbed the Great Recession. Fewer than 1 percent of all Canadian mortgages are in arrears.

That's notable given that the recent U.S. economic turmoil was triggered by a meltdown in mortgage finance, forcing an unprecedented government rescue of Wall Street investment banks and the collapse of more than 300 smaller banks as the housing sector went bust.

How'd Canada avoid all that?

"This sounds very simple, but one of our CEOs has said we are in the business of making loans to people who will pay them back," said Terry Campbell, vice president of policy for the Canadian Bankers Association in Ottawa.

There's a certain amount of apples to oranges when comparing the two systems of mortgage finance. Canada's population last year was estimated at 34.3 million, while the U.S. population now exceeds 307 million. The U.S. economy is the world's biggest; Canada ranks ninth.

Canadian banks were recently named the best in the world by the World Economic Forum, but they're a much smaller universe of lenders — 71 that are federally regulated, compared with more than 8,000-plus U.S. lenders insured by the Federal Deposit Insurance Corp.

Canada also lacks a big tax write-off for the interest that borrowers pay on their mortgages. They get a capital gains tax exemption on any profits on the sale of their primary residence, and that's it. Yet the rate of home ownership in Canada is equal to, or greater than the U.S. rate, and the lack of mortgage-interest deductions leads Canadians to swiftly pay down their mortgage debt.

"I'm not aware of any disparagement of the Canadian model or dismissal of the Canadian model. There are some interesting features to it," said Stuart Gabriel, a finance professor in the Anderson School of Management at the University of California-Los Angeles. "They've insisted all along on the more rigorous mortgage underwriting, and because of that never found themselves originating subprime and no-doc mortgages . . . some very basic items such as stringency of underwriting seem to go a long way."

Canada doesn't have an equivalent to Fannie Mae or Freddie Mac, which purchase mortgages from banks and pool them into bonds. The argument for Fannie and Freddie is that they take loans off of a bank's books, freeing them to lend more.

Canada has no such secondary market for mortgages, yet it hasn't hurt the ability of its banks to lend or significantly raised the cost for borrowers.

Canadian mortgages aren't non-recourse loans, meaning homeowners can't simply walk away from their mortgages. Even if they lose their home, they still owe their mortgage debt.

"You mail your keys into the bank here and guess what, you are not off the hook," said Gregory Klump, the chief economist in Ottawa for the Canadian Real Estate Association.

Lessons from Canada could prove useful. In the next few weeks, the Obama administration must, by law, outline its vision for what to do with Fannie Mae and Freddie Mac. They've been in government conservatorship since the summer of 2008. The administration must unveil its roadmap for how and when they're to be changed and moved out of government control.

By July, the administration must establish the new Consumer Financial Protection Bureau, whose chief functions will include policing mortgage lending and defining suitable mortgages.

The issue of mortgage-interest deductions probably will come up this year when Congress debates deficit reduction. A blue-ribbon National Commission on Fiscal Responsibility and Reform late last year recommended a serious scaling back of the U.S. mortgage-interest deduction as a means of raising more revenue and lowering deficits and debt.

Defenders of the popular U.S. mortgage-interest deduction call it a big driver of U.S. home ownership, which peaked in 2005 at 69.1 percent. (It fell to 66.9 percent late last year.)

But even without a mortgage-interest deduction, Canada's percentage of home ownership_ at 68.4 percent, according to the most recent Canadian census in 2006 and now thought to be higher — is comparable to U.S. home ownership rates.

"There's an incentive for them to pay off their houses relatively quickly, but the home ownership rates in Canada and the U.S. are comparable. The fraction of people who own their houses free and clear in Canada is much bigger," said William Strange, a professor of real estate at the University of Toronto's Rotman School of Management.

Added Klump: "The sooner you can get out of debt, the faster you can amass retirement savings."

Canadian banks generally provide 25-year mortgages, with 20 percent down payment. The first five years of the loan is a fixed rate, after which it adjusts to current market rates in five-year increments until the loan is paid off.

Should a borrower opt not to put down 20 percent on a home purchase, they must purchase mortgage insurance to cover the debt in the case of default.

U.S. borrowers are accustomed to fixed-rate loans of 15 years or 30 years, and U.S. mortgage bankers warn that the Canadian model of adjusting interest rates every five years may soon be less attractive.

"There is a lot of interest-rate risk that is being put on Canadian buyers. That has worked over the past couple of decades. Now that we're looking at increased borrowing demands by national governments, everyone is projecting interest rates going back up," said Jay Brinkmann, the chief economist for the Mortgage Bankers Association. "As these Canadian mortgages reset, (borrowers) might start looking longingly at a U.S. system" that provides longer fixed interest rates on mortgages.

In some ways, the U.S. is already adopting big parts of the Canadian model.

"I think the U.S. system may be eliminating certain types of loans . . . I think we're seeing greater emphasis on down payments," said Brinkmann, who's careful to call it a return to past practices and not the Canadian model.

Lenders, he said, are shying away from second mortgages. And there are greater demands for private mortgage insurance, even on refinanced mortgages

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The economic crisis was an 'inside job'

By Kathleen Parker

Wednesday, October 13, 2010; A19

If you haven't been humming tunes from "Les Misérables," you haven't seen "Inside Job," the new documentary about how our economic crisis evolved.

The most forgiving American will want to seize a pitchfork and march on Wall Street. Or Harvard Square. Or in front of the White House. There are so many despicable parties, it's hard to pick a favorite. Is it time to reconsider the Axis of Evil?

The film, written and directed by Charles Ferguson (and narrated by Matt Damon), will be opening in select cities this week. Although much of the story is familiar, Ferguson manages to weave together decades of bits and pieces into a dramatic narrative that plays like a whodunit. Names have faces, and storytelling combined with graphic illustrations helps explain the complex series of events that led to the global meltdown. Here are a few takeaways:

One, trying to assign blame to either Democrats or Republicans is pointless. Everyone is culpable. From the early 1980s, when Ronald Reagan deregulated banks, through the two Bushes, Bill Clinton and now Barack Obama, each administration has endorsed -- and each Congress has helped tweak -- laws and rules that made systemic abuses and the meltdown not only possible but, looking back, inevitable.

Two, many investment bankers knew the mortgage loans they were packaging and selling were junk. They knew because their own analysts told them so. Tens of thousands of loans failed to meet basic underwriting standards, according to recent testimony before the Financial Crisis Inquiry Commission, a bipartisan group created to examine the causes of the meltdown. Not only that, Wall Street insiders were betting against their own customers and institutions.

Throughout the system, from the lending institutions to federal regulators to congressional overseers, those charged with protecting consumers averted their eyes.

Three, the cozy relationship between Wall Street and Ivy League academia, wherein economists push policies that benefit them financially, is eye-opening. In some cases, business professors and economists at America's top schools were shown to have conflicts of interest as they advanced policies for which they had been paid directly or that otherwise benefited them.

In other instances, we see that the same people who created policies that ultimately led to these abuses are still -- or were until recently -- running the show. Notably missing from the film, declining to be interviewed, are Larry Summers, Tim Geithner, Hank Paulson, Alan Greenspan and Robert Rubin.

This is not to say that what benefits Wall Street necessarily hurts average Americans or that all bankers are corrupt, but the system clearly enabled the abuses that have led to current circumstances. The attitude seemed to be that everyone was doing it.

When the big banks failed, of course, taxpayers were left holding the bag. Even though there was wide consensus that the bailouts were necessary to get credit moving again, there is simply no justification for the bonuses and golden parachutes that went to the very people who drove their institutions -- and us -- off a cliff. Reward for failure was the best gig in town.

Although most of what the movie highlights is familiar, there's something jarring about seeing the culprits up close in all their taxpayer-subsidized, suntanned splendor -- their multiple estates and private jets juxtaposed against shuttered homes and unemployed Americans living in tents. Obscene is the word that comes to mind.

I'm not one to advance class warfare, and most Americans still want to preserve a market system that leaves open the possibility that they, too, can work hard and achieve wealth. But it's clear from "Inside Job" that the game has been rigged so that only a few were in positions to get rich at the expense of the middle class, not just here but globally.

The movie isn't perfect. One wonders what was left on the editing floor. Some of those interviewed, who dodged questions or gave unacceptable answers, also looked stupid. None of these guys is stupid.

And, at the end, Ferguson couldn't resist making an editorial comment as the camera panned the Statue of Liberty. "Some things are worth fighting for."

We get it. The film is so well done and presented so factually that no Hollywood prodding was needed. Anyone who sees this movie will be furious. Thus, the only remaining question is why some of these people aren't being prosecuted for fraud or at least shirking fiduciary duty.

It would seem as never before that the White House should hire a special prosecutor. Ferguson's movie, which the president and his economic team had best watch -- and soon -- could use a sequel: "The Perp Walk."

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“Wells Fargo, for instance, which has leeched $25 billion in bailout money, bought an inadvertently hilarious full-page ad in The Times to whine about the junkets to Las Vegas and elsewhere it was forced to cancel because of public outrage.” --- Maureen Dowd, NYTimes

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US foreclosures soar, housing prices slump

By Patrick Martin

31 December 2010

The number of completed home foreclosures rose to 245,000 in the third quarter, according to a report from bank regulators that covers only two thirds of all US home mortgages, those held by national banks and savings & loan institutions.

The figure was reported in the quarterly mortgage report filed by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision, which regulate banks and S&Ls respectively.

The overall number of foreclosures completed in the July-September period is likely well over 300,000, making it virtually certain that total foreclosures will top one million in 2010. The total number of foreclosures in process increased to 1.2 million, up 4.5 percent from the second quarter and up 10.1 percent from the third quarter of 2009.

Newly initiated foreclosures jumped to 382,000 in the third quarter, a rise of 31.2 percent compared to the second quarter and 3.7 percent above the third quarter of 2009. The larger number of initiated foreclosures compared to completed foreclosures means that the number of foreclosures can be expected to rise sharply in the coming year.

Other figures in the OCC and OTS report showed widespread distress among homeowners. Slightly more than one in eight homeowners with a mortgage was behind in payments or in foreclosure, 12.6 percent, compared to 12.8 percent one year ago. About half of these, or 5.8 percent of the total, were at least 90 days behind in payments, while 3.6 percent were actually in foreclosure.

The glut of foreclosed homes continues to depress the housing market, with home prices falling 1.3 percent in October, according to the widely followed Case-Shiller index, and home prices in several major cities falling 20 percent or more.

Distressed sales—where the homeowner is either in foreclosure or behind on payments—account for about one-third of all US home sales according to RealtyTrac, and these sales were only made based on an average drop of 27 percent in the purchase price.

At least one published estimate, from Moody’s Analytics, said that total foreclosures would reach 1.8 million for this year, bringing the total number of foreclosures since the subprime mortgage crisis exploded in 2007 to more than 5.5 million.

Moody’s estimated that 2.1 million families would be foreclosed in 2011, and the Mortgage Bankers Association, the industry trade group, said that the total number threatened with losing their homes is four million.

That would bring the total number who lost or will lose their homes over the five-year period, 2007-2011, under the combined impact of financial collapse and economic slump, to a staggering nine million families.

An additional 10.9 million families are “under water” on their homes, meaning that they owe more in mortgage debt than the home can be sold for in the current depressed market.

Adding to the potential financial impact is the $426 billion in second mortgages on the balance sheets of just four banks: Bank of America, JPMorgan Chase, Wells Fargo and Citigroup.

In a single California county, Contra Costa County in the Bay Area, the number of foreclosures has exploded from 777 in 2000 to more than 12,200 in 2010, according to a profile this week in the New York Times. The city of Richmond, the poorest in Contra Costa County, reported in April that more than 2,000 homes and apartments were in foreclosure. In a single ZIP code, 94801, almost half of all homes were “in foreclosure or financed with subprime mortgages and thus at risk for foreclosure.”

In the face of this colossal social crisis, the Obama administration program to assist distressed homeowners is a complete failure. According to the bank regulators’ report, only 470,000 homeowners received loan assistance under the Home Affordable Modification Program (HAMP) during the third quarter. The total number aided through the life of the program is now estimated at 700,000 to 800,000, less than one in ten of those threatened with foreclosure.

The actual shortfall is much greater, since, perversely, only homeowners with the smallest gap between mortgage debt and ability to pay have received any support. The Obama administration initially pledged $75 billion for the loan modification program, but the Treasury has paid out less than $800 million and the total cost is now estimated at $4 billion.

The stinginess towards families facing foreclosure and eviction is in sharp contrast to the hundreds of billions lavished on the banks and other financial institutions that benefited from the Wall Street bailout.

The Obama administration intervened aggressively on only one mortgage-related issue: the widespread calls for a moratorium on foreclosures in early October, when Bank of America, JP Morgan Chase, Ally Financial and other big mortgage lenders admitted that they had falsified hundreds of thousands of foreclosure documents filed with state courts around the country.

Numerous congressional Democrats, and many state officials of both parties, called for a temporary halt to foreclosures, and the sheriff of Cook County, Illinois, which includes Chicago, suspended enforcement of eviction orders.

Shaun Donovan, the secretary of Housing and Urban Development, opposed a moratorium on foreclosures and evictions, saying it would “do more harm than good.” He and other top officials warned that the result would be a loss of confidence in the US mortgage market on the part of Wall Street and international investors.

The major banks resumed foreclosure proceedings after a brief halt and are on course to accelerate their efforts in the new year.

WSWS.org… get on their free NO ADS E-NEWS!

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Obama’s phony banking “reform”

27 April 2010

Debate on the Senate version of the Obama administration’s bank regulatory overhaul is expected to begin shortly. The House of Representatives passed its banking bill last December.

Neither bill does anything to curb the power of the banks or limit their parasitic and socially destructive activities. What the media is calling the “most sweeping overhaul” of the banking system since the Great Depression in reality sanctions the ever greater monopolization of the financial system by a handful of Wall Street giants, imposes no limits on executive pay, and allows the banks and hedge funds to continue gambling on exotic and largely unregulated securities such as collateralized debt obligations and credit default swaps.

The so-called bank “reform” is an exercise in mass deception—an attempt to placate popular hostility to the banks and provide the government with political cover while it continues to do the bidding of Wall Street.

The bills have been drawn up in the closest consultation with bankers and bank lobbyists. This collusion has been widely reported in the press and presented as a perfectly normal and acceptable fact of political life. The front-page lead article in Monday’s Wall Street Journal describes the intensive lobbying being carried out by billionaire investor Warren Buffet to alter the Senate bill’s provisions on derivatives.

Buffet, an Obama supporter, wants to exempt existing derivatives deals from collateral requirements in the current language of the bill—a change that would save him billions on his $63 billion derivatives portfolio. Both senators from his home state of Nebraska, one Democrat and one Republican, are championing his cause.

This is just one example of the web of corruption and bribery that extends from Wall Street to the White House and Capitol Hill. The banks have thus far spent $455 million lobbying Congress on the overhaul and handed out $34 million in 2010 election campaign donations, most of it to Democrats.

The circle of corruption includes the ratings companies such as Moody’s and Standard & Poor’s, which blessed toxic subprime mortgage-backed securities with triple-A ratings in return for fees from the banks they were rating, and government regulators who move seamlessly from regulatory offices to lucrative posts at the banks they were supposedly overseeing.

The colossuses of Wall Street amass their huge profits by means of fraud and swindling. Over the past few weeks systematic accounting fraud at Lehman Brothers has been exposed and the Securities and Exchange Commission has indicted Goldman Sachs for defrauding its clients in the run-up to the subprime mortgage crash. This is only the tip of the iceberg.

Obama’s so-called reform will do nothing to hold accountable the criminals at the head of the banks and hedge funds or break up the financial behemoths that exert a stranglehold on the economy. Instead, it will set up a mechanism to institutionalize government rescue operations of big financial firms to protect the interests of bank executives, shareholders and creditors, ultimately at public expense.

The lawless and reckless actions of Wall Street CEOs have had devastating consequences for tens of millions of people in the US and around the world. The wreckage left in the wake of the financial tsunami of 2008 is registered in millions of lost jobs, home foreclosures, utility shutoffs, and rising hunger, disease and poverty.

With the help of trillions of dollars in taxpayer bailouts, the bankers are making more money today than ever, even as schools are closed, libraries disappear and museums and opera houses are shuttered. There is, the people are told, “no money” for jobs or basic social services.

There is plenty of money. The problem is that it is concentrated in the hands of a financial aristocracy. The immense concentration of wealth among these individuals is not only morally repugnant, it is a menace to society. It is the result of the plundering of the social wealth to feed criminal appetites, at the direct cost of the productive forces.

During the rise of American capitalism as an industrial power, the vast fortunes of the corporate elite, while achieved through ruthless exploitation of the working class, were associated with the expansion of industry and the production of useful products. That is not the case with today’s financial elite. Its wealth is amassed on the basis of financial manipulation and outright fraud, linked to the destruction of the social infrastructure and industry.

The Socialist Equality Party advocates a policy that proceeds from the needs of the people and society as a whole, not the personal fortunes of the bankers and big investors. We call for:

• The criminal prosecution of bankers and speculators whose illegal actions contributed to the deepest economic crisis since the Great Depression. They must be held legally accountable and given appropriate sentences to prevent a recurrence of such practices.

• The expropriation of the wealth of the top bankers, hedge fund managers, traders and speculators. This would immediately free up several trillion dollars, money that could go to a public works program to provide jobs and rebuild the social infrastructure—schools, housing, clinics, libraries, cultural facilities, the energy system. This money could also be used to help provide relief to the victims of the economic crisis—to maintain full wages for those laid off, put a stop to foreclosures and utility shutoffs, provide full medical coverage.

• The nationalization of the banks and major financial institutions and their transformation into public utilities under the democratic control of the working population. This is a prerequisite for the rational and planned development of the economy and the allocation of resources to rebuild the social infrastructure, end poverty, raise living standards and overcome social inequality.

Only such a socialist program can break the grip of the financial aristocracy and liberate the productive forces for the benefit of society as a whole. It can be achieved only through the independent political mobilization of the working class against Obama, the two parties and big business, and the capitalist system that they defend.

Jin Lee/Bloomberg News Vikram S. Pandit of Citigroup saw his salary raised to $1.75 million, from $1. But James P. Gorman of Morgan Stanley, below, is expected to earn less than the $15 million he got for 2009.

Jin Lee/Bloomberg News

Talk about a raise.

Citigroup’s chief executive, Vikram S. Pandit, after nearly two years of earning a mere $1 in salary while he tried put the bank back on track, has been awarded a $1.75 million salary, according to a regulatory filing on Friday.

The lifting of Mr. Pandit’s symbolic hair shirt came as Morgan Stanley disclosed much, though not all, of the compensation for its leader. James P. Gorman, in his first year as chief executive of Morgan Stanley, will earn less than the $15 million he took home in 2009 when he was the firm’s co-president, according to a person familiar with his compensation but not authorized to speak publicly about it.

Other Wall Street banks — including Goldman Sachs and Bank of America — are still to report what their leaders will be paid. JPMorgan Chase disclosed compensation for some of its senior mangers, but has not yet approved the pay package for its chief executive and chairman, Jamie Dimon. Mr. Dimon is expected to earn as much, if not more, than the $17.5 million he took home in 2009, which made him among the highest-paid Wall Street executives. No decision has been made. But JPMorgan had a banner 2010 — it was the most profitable year in the company’s history — and four of Mr. Dimon’s top lieutenants have already been awarded stock worth more than $10 million each.

Two years since emerging from the financial crisis, Wall Street profits — and big paychecks — appear to be back. But the public uproar that erupted over outsize bonuses that banks awarded, even after accepting a government bailouts, has not yet been tamed. Banks are still trying to balance the need to attract star executives and traders with regulators’ demands to ensure that their pay programs do not create excessive risk. Gone is some of the sensitivity to lawmakers and the broader public, who were angry at seeing such lavish paydays as they were losing their homes and jobs.

As bonus checks were doled out at several big banks earlier this week, it is clear that 2010 is shaping up to be a very good year — although perhaps not as good as a year earlier. Alan Johnson, a longtime Wall Street compensation consultant, said that he expected pay to fall about 10 to 15 percent for 2010, and perhaps more than twice that amount in many trading businesses where the results were much weaker.

Amid greater scrutiny from the public and federal regulators since the financial crisis, the banks have awarded a greater portion of compensation in the form of stock — some even higher than 50 percent — and emphasized the use of deferred pay and policies to claw back ill-gotten bonuses.

Over all, what is remarkable is the wide variation in pay packages among the banking giants. At the industry’s strongest banks, employee compensation, on average, fell markedly from a year ago. At Goldman Sachs, workers earned, on average, about $398,000 in 2010, down 11 percent from a year ago. At JPMorgan’s investment bank, employee pay was, on average, about $370,000 — about 2.4 percent lower than in 2009 and in line with the overall firm’s decline in compensation.

Wall Street’s star bankers and traders, regardless of where they work, will still reap paychecks worth millions of dollars.

Meanwhile, several of the weaker players ratcheted their compensation packages upward. At Morgan Stanley, for example, workers’ paychecks rose about 8 percent, on average, to about $257,000. Citigroup and Bank of America, whose average paychecks are substantially lower because they employ tens of thousands consumer bankers who draw smaller salaries and bonuses, reported increases of about 3 percent and 10 percent, respectively.

Some pay analysts suspect that this divergence may stem, at least in part, from the need of these more troubled firms to offer bigger paydays to attract and retain top talent.

Those occupying offices in the corporate suite continued to score big paydays.

Citigroup’s board had signaled a pay increase for Mr. Pandit last fall when they granted stock awards to several of his top lieutenants and announced that they planned to restore his compensation so that it would be in line with other Wall Street chiefs. Mr. Pandit had vowed at a Congressional hearing in February 2009 that he would accept only $1 until the bank returned to profitability.

On Tuesday, Citigroup posted an annual profit in 2010, the first time it had done so since the financial crisis struck. Richard D. Parsons, Citigroup’s chairman, said that the board was “very pleased with the progress the company has made under Vikram’s leadership” and that he merited the raise for the coming year. Citigroup’s board could also choose to award him additional stock and options when it reviews his 2011 compensation later this year. Of course, Mr. Pandit still holds about $79.7 million in cash from the sale of his investment fund, Old Lane Partners, to Citigroup in April 2007.

At JPMorgan Chase, Jes Staley, the head of its investment bank, was awarded more than $14.5 million in stock and options, according to Equilar, a compensation research firm. His total compensation may be even higher when his salary and bonus are disclosed. Ina R. Drew, the bank’s chief investment officer, and Mary Callahan Erdoes, the head of its asset management division, each received stock and options worth more than $11 million. That poises them to be among the highest-paid women on Wall Street.

On Friday, Morgan Stanley’s board awarded Mr. Gorman stock and options valued at $7.4 million, according to Equilar. But this represents only the equity portion of Mr. Gorman’s pay package; the cash component will be announced later this year.

Morgan Stanley also released details of more than $32 million in stock awards for 10 other top executives.

*

Simon Johnson reviews Too Big to Fail by Andrew Sorkin and other books on the financial crisis

Sunday, December 27, 2009; B01

TOO BIG TO FAIL

The Inside Story of How Wall Street and Washington Fought to Save the Financial System -- and Themselves

By Andrew Ross Sorkin

Viking. 600 pp. $32.95

LAST MAN STANDING

The Ascent of Jamie Dimon and JPMorgan Chase

By Duff McDonald

Simon & Schuster. 340 pp. $28

PAST DUE

The End of Easy Money And the Renewal of the American Economy

By Peter S. Goodman

Times. 336 pp. $25

At 6:30 a.m. on June 6, 1944, U.S. forces began their assault on Omaha Beach as part of the Normandy landings. Casualties among the first wave were horrendous as infantry struggled out of their landing crafts, known as Higgins boats, under intense fire. Incredible acts of individual heroism and great leadership on the spur of the moment eventually saved the day, but not before chaos and death swept the sand. Combat historian S.L.A Marshall described Omaha Beach as "an epic human tragedy which in the early hours bordered on total disaster."

At 11 a.m. on Sept. 15, 2008, Lloyd Blankfein pulled up in front of a Manhattan office building to continue working on a way to save his firm, Goldman Sachs. "I don't think I can take another day of this," one of his employees remarked. Blankfein shot back, "You're getting out of a Mercedes to go to the New York Federal Reserve. You're not getting out of a Higgins boat on Omaha Beach."

Blankfein was right: Being a Wall Street banker in 2008 was nothing like being a soldier during the Normandy invasion. The financial crisis may have been a once-in-a-lifetime struggle for a group of very well-paid banking executives, but the hardships they endured were long hours, uncomfortable phone calls, and mediocre takeout food. The only thing that JPMorgan Chase and Goldman Sachs had in common with the U.S. forces was that, ultimately, they won: The Wall Street executives kept their jobs, their bonuses and their pensions; they benefited from unprecedented rule changes and unlimited monetary and fiscal support; and their firms became even bigger and more dangerous to the economic health of society.

Stephen Ambrose retold the human dimensions of World War II in convincing and excruciating detail. Andrew Ross Sorkin is the Stephen Ambrose for our financial crisis, with the blow-by-blow story of how rich bankers fought to save the Wall Street they knew and loved. The details in "Too Big To Fail" will turn your stomach. The arrogance, lack of self-awareness, and overweening pride are astonishing.

Sorkin puts you there -- you see events unfold moment by moment, you hear the conversations, you can sense the hubris. The executives of our largest banks ran their firms into the ground, taking excessive risks that even now they fail to understand fully. But, as these individuals saw it, unless they personally were saved on incredibly generous terms, the world's economy would grind to a halt. This is as compelling as it is appalling.

Jamie Dimon, the astute, well-connected and ultimately victorious head of JPMorgan Chase -- a character whose development is revealed meticulously in Duff McDonald's "Last Man Standing" -- told his shareholders' meeting earlier this year that 2008 was probably the company's "finest year ever." He was talking about what you and I call the worst financial crisis since the Great Depression.

Sorkin in his general narrative and McDonald in his biography are sympathetic to their protagonists, but the portraits that emerge are not encouraging. Perhaps for this reason, both shy away somewhat from a key point: You can blame the bankers all you want, but it is the government's job to prevent the financial sector (and anyone else) from holding or exercising this kind of power over us. Where was the government?

By 2008, our executive and legislative branches had long been deep in bipartisan slumber, allowing vulnerabilities to build up in the form of overspending, rising consumer debt levels and lax (or nonexistent) protection for consumers against outrageous practices by the financial sector. This bigger picture is missing from Sorkin's and McDonald's blow-by-blow accounts, but it is a recurrent theme in "Past Due," by journalist Peter S. Goodman.

We can quibble about the relative importance of some details -- such as the role of China's high savings rate in lowering global interest rates and feeding the American credit boom -- in Goodman's highly informative account. But there is no question that politicians either believed that crazy "financial engineering" created a sound basis for sustainable growth or just loved what the financial system could do for them at election time.

And, as Sorkin relates, it is hard to escape the conclusion that the rhetoric regarding our supposedly free markets without government intervention just masks the reality -- that there is a revolving door between Wall Street and Washington, and powerful people bend the rules to help each other out. In an illustration of Wall Street clubbiness, Sorkin documents a meeting in Moscow between Hank Paulson, secretary of the treasury (and former head of Goldman Sachs), and the board of Goldman Sachs. As the storm clouds gathered at the end of June 2008, Paulson spent an evening talking substance with the board -- while agreeing not to record this "social" meeting in his official calendar. We do not know the content of the conversation, but the appearance of this kind of exclusive interaction shows how little our top officials care about public perceptions of favoritism.

In saner times, this would constitute a major scandal. At moments of deep crisis, understanding what influences policymakers and having access to them can help a firm survive on advantageous terms. Goldman Sachs was saved, in large part, by suddenly being allowed to become a bank holding company on Sept. 21, 2008. Our most senior government officials determined that the United States must allow Goldman to keep its risky portfolio of assets, while offering it essentially unfettered access to cheap credit from the Federal Reserve. In rescuing a crippled investment bank, the Treasury created the world's largest government-backed hedge fund.

In the face of these developments, Andrew Haldane, head of financial stability at the Bank of England, has become blunt about the way our banking system interacts with (and rips off) taxpayers. In a recent paper that represents the straightest talk heard from the official sector in a long while, Haldane puts it this way: The government may say "never again" to bailouts, but when faced with the choice to either "rescue big banks or allow the world economy to collapse," it will reasonably choose the route of rescue. But, knowing this, the people running our biggest banks have an incentive to take more risk -- if things go well, bank executives get the upside, and if there's a problem, the taxpayer will pick up the check. If a financial sector boss wants greater assurance of a bailout, he or she should make bigger and potentially more dangerous bets -- so the government simply cannot afford to let that bank fail.

This, Haldane argues, is our "doom loop" -- big banks know they can get away with the same behavior (and more) again, and we are doomed to repeat the same boom-bust-bailout cycle. A long time ago, President Andrew Jackson's private secretary, Nicholas Trist, described the Second Bank of the United States, the last financial institution to seriously challenge the power of the president, thus: "Independently of its misdeeds, the mere power, -- the bare existence of such a power -- is a thing irreconcilable with the nature and spirit of our institutions." Unless and until we break the political power of our largest banks, the middle class will be hammered down. Whose taxes do you think will be raised to reflect the costs of repeated financial shenanigans? The financial sector will become even richer and more powerful. If you didn't like where inequality in the United States was already heading, wait until you see the effects of this recession.

The most significant result of the financial crisis is the emergence of six large banks that are undoubtedly too big to fail and therefore enjoy a strengthened government guarantee; Goldman, JPMorgan, Citigroup, Bank of America, Wells Fargo and Morgan Stanley are the beneficiaries of the doom loop. The most significant non-result is the fact that no comprehensive legislation has yet been passed to reform the financial sector. Without really serious reform, we have every reason to start counting down to the next financial crisis, and to the next fleet of Mercedes lining up before the New York Fed.

Simon Johnson is co-founder of the blog BaselineScenario, co-author of "13 Bankers," to be published in April, and a professor at MIT's Sloan School of Management.

*

*

Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses

BY TIMOTHY P CARNEY

Editorial Reviews

Obama Is Making You Poorer—But Who’s Getting Rich?

Goldman Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack Obama was supposed to chase from the temple—are profiting handsomely from Obama’s Big Government policies that crush taxpayers, small businesses, and consumers. In Obamanomics, investigative reporter Timothy P. Carney digs up the dirt the mainstream media ignores and the White House wishes you wouldn’t see. Rather than Hope and Change, Obama is delivering corporate socialism to America, all while claiming he’s battling corporate America. It’s corporate welfare and regulatory robbery—it’s Obamanomics.

Congressman Ron Paul says, “Every libertarian and free-market conservative needs to read Obamanomics.” And Johan Goldberg, columnist and bestselling author says, “Obamanomics is conservative muckraking at its best and an indispensable field guide to the Obama years.”

If you’ve wondered what’s happening to America, as the federal government swallows up the financial sector, the auto industry, and healthcare, and enacts deficit exploding “stimulus packages,” this book makes it all clear—it’s a big scam. Ultimately, Obamanomics boils down to this: every time government gets bigger, somebody’s getting rich, and those somebodies are friends of Barack. This book names the names—and it will make your blood boil.

*

Obama Is Making You Poorer—But Who’s Getting Rich?

Goldman Sachs, GE, Pfizer, the United Auto Workers—the same “special interests” Barack Obama was supposed to chase from the temple—are profiting handsomely from Obama’s Big Government policies that crush taxpayers, small businesses, and consumers.

Investigative reporter Timothy P. Carney digs up the dirt the mainstream media ignores and the White House wishes you wouldn’t see. Rather than Hope and Change, Obama is delivering corporate socialism to America, all while claiming he’s battling corporate America. It’s corporate welfare and regulatory robbery—it’s Obamanomics. In this explosive book, Carney reveals:

* The Great Health Care Scam—Obama’s backroom deals with drug companies spell corporate profits and more government control

* The Global Warming Hoax—Obama has bought off industries with a pork-filled bill that will drain your wallet for Al Gore’s agenda

* Obama and Wall Street—“Change” means more bailouts and a heavy Goldman Sachs presence in the West Wing (including Rahm Emanuel)

* Stimulating K Street—The largest spending bill in history gave pork to the well-connected and created a feeding frenzy for lobbyists

* How the GOP needs to change its tune—drastically—to battle Obamanomics

If you’ve wondered what’s happening to our country, as the federal government swallows up the financial sector, the auto industry, and healthcare, and enacts deficit exploding “stimulus packages” that create make-work government jobs, this book makes it all clear—it’s a big scam. Ultimately, Obamanomics boils down to this: every time government gets bigger, somebody’s getting rich, and those somebodies are friends of Barack. This book names the names—and it will make your blood boil.

*

Praise for Obamanomics

“The notion that ‘big business’ is on the side of the free market is one of progressivism’s most valuable myths. It allows them to demonize corporations by day and get in bed with them by night. Obamanomics is conservative muckraking at its best. It reveals how President Obama is exploiting the big business mythology to undermine the free market and stick it to entrepreneurs, taxpayers, and consumers. It’s an indispensable field guide to the Obama years.”

—Jonha Goldberg, LA Times columnist and best-selling author

“‘Every time government gets bigger, somebody’s getting rich.’ With this astute observation, Tim Carney begins his task of laying bare the Obama administration’s corporatist governing strategy, hidden behind the president’s populist veneer. This meticulously researched book is a must-read for anyone who wants to understand how Washington really works.”

—David Freddoso, best-selling author of The Case Against Barack Obama

“Every libertarian and free-market conservative who still believes that large corporations are trusted allies in the battle for economic liberty needs to read this book, as does every well-meaning liberal who believes that expansions of the welfare-regulatory state are done to benefit the common people.”

—Congressman Ron Paul

“It’s understandable for critics to condemn President Obama for his ‘socialism.’ But as Tim Carney shows, the real situation is at once more subtle and more sinister. Obamanomics favors big business while disproportionately punishing everyone else. So-called progressives are too clueless to notice, as usual, which is why we have Tim Carney and this book.”

—Thomas E. Woods, Jr., best-selling author of Meltdown and The Politically Incorrect Guide™ to American History

THE REASON OUR BORDERS ARE KEPT OPEN IS TO FACILITATE ILLEGALS CLIMBING THEM AND HOPPING OUR JOBS.

EMPLOYERS ALL OVER AMERICA ARE AT WAR WITH THE AMERICAN PEOPLE OVER PAYING LIVING WAGES WITH BENEFITS.

THE LARGEST EMPLOYER IN THE NATION IS SADLY WAL-MART. FIVE MEMBERS OF THE WALTON FAMILY HAVE ASSETS OF $20 BILLION. THAT’S $20 BILLION EACH! AND YET WAL-MART PAYS SOME OF THE WORST WAGES IN THE NATION, AND HAS IN THE PAST EVEN HAD OFFICES TO DIRECT THEIR EMPLOYEES TO PUBLICS SOURCES (WELFARE) FOR HEALTHCARE.

LA RAZA ENDORSED HILLARY CLINTON WAS ONCE ON THE BOARD OF DIRECTORS OF WAL-MART, AND DID NOTHING ABOUT THE EXPLOITATION OF ITS EMPLOYEES. SHE HAS PUSHED FOR NON-ENFORCEMENT, NO E-VERIFY, NO WALL, NO ENGLISH ONLY, DRIVERS LICENSES FOR ILLEGALS SO AN ILLEGALS CAN MORE EASILY DENY THEIR ILLEGAL STATUS, AND JOBS TO ILLEGALS FIRST.

*

Robert Reich. Former Secretary of Labor; Professor at Berkeley; Author, 'Aftershock: The Next Economy and America's Future'

The Secret Big-Money Takeover of America

Not only is income and wealth in America more concentrated in fewer hands than it's been in 80 years, but those hands are buying our democracy as never before -- and they're doing it behind closed doors.

Hundreds of millions of secret dollars are pouring into congressional and state races in this election cycle. The Koch brothers (whose personal fortunes grew by $5 billion last year) appear to be behind some of it, Karl Rove has rounded up other multimillionaires to fund right-wing candidates, the U.S. Chamber of Commerce is funneling corporate dollars from around the world into congressional races, and Rupert Murdoch is evidently spending heavily.

No one knows for sure where this flood of money is coming from because it's all secret.

But you can safely assume its purpose is not to help America's stranded middle class, working class, and poor. It's to pad the nests of the rich, stop all reform, and deregulate big corporations and Wall Street -- already more powerful than since the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators.

Credit the Supreme Court's grotesque decision in Citizens United vs. the Federal Election Commission, which opened the floodgates. (Even though 8 of 9 members of the Court also held disclosure laws constitutional, the decision invited the creation of shadowy "nonprofits" that don't have to reveal anything.)

According to FEC data, only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.

Last week, when the Senate considered a bill to force such disclosure, every single Republican voted against it -- thereby revealing the GOP's true colors, and presumed benefactors. (To understand how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)

Maybe the Disclose Bill can get passed in lame-duck session. Maybe the IRS will make sure Karl Rove's and other supposed nonprofits aren't sham political units. Maybe pigs will learn to fly.

In the meantime we face an election that marks an even sharper turn toward plutocratic capitalism than before -- a government by and for the rich and big corporations -- and away from democratic capitalism.

As income and wealth has moved to the top, so has political power. That's why, for example, it's been impossible to close the absurd tax loophole that allows hedge-fund and private-equity managers to treat much of their income as capital gains, subject to a 15 percent tax (even though they're earning tens or hundreds of millions a year, and the top 15 hedge-fund managers earned an average of $1 billion last year). Why it proved impossible to fund expanded health care by limiting the tax deductions of the very rich. Why it's so difficult even to extend George Bush's tax cuts for the bottom 98 percent of Americans without also extending them for the top 2 percent - even though the top won't spend the money and create jobs, but will blow a $36 billion hole in the federal budget next year.

The good news is average Americans are beginning to understand that when the rich secretly flood our democracy with money, the rest of us drown. Wall Street executives and top CEOs get bailed out while under-water homeowners and jobless workers sink.

A Quinnipiac poll earlier this year found overwhelming support for a millionaire tax.

But what the public wants means nothing if our democracy is secretly corrupted by big money.

Right now we're headed for a perfect storm: An unprecedented concentration of income and wealth at the top, a record amount of secret money flooding our democracy, and a public in the aftershock of the Great Recession becoming increasingly angry and cynical about government. The three are obviously related.

We must act. We need a movement to take back our democracy. (If tea partiers were true to their principles, they'd join it.) As Martin Luther King once said, the greatest tragedy is "not the strident clamor of the bad people, but the appalling silence of the good people."

What can you do?

1. Read Justice Steven's dissent in the Citizens United case, so you're fully informed about the majority's pernicious illogic.

2. Use every opportunity to speak out against this decision, and embarrass and condemn the right-wing Justices who supported it.

3. In this and subsequent elections, back candidates for congress and president who vow to put Justices on the Court who will reverse it.

4. Demand that the IRS enforce the law and pull the plug on Karl Rove and other sham nonprofits.

5. If you have a Republican senator, insist that he or she support the Disclose Act. If they won't, campaign against them.

6. Support public financing of elections.

7. Join an organization like Common Cause, that's committed to doing all this and getting big money out of politics. (Personal note: I'm so outraged at what's happening that I just became chairman of Common Cause.)

8. Send this post to your friends (including any tea partiers you may know).

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

*

“Obama defended the bonuses on the grounds that Blankfein and Dimon are “savvy businessmen.” This statement gave what amounted to official carte blanche for the multi-million-dollar bonuses paid to hundreds of other “savvy businessmen,” even as the government oversees a massive attack on the living conditions of the vast majority of the population.”

REALITY OF BARACK OBAMA:

BANKSTER PROFITS, WELFARE AND BONUSES UP! WAY UP! SO ARE FORECLOSURES!

SOCIAL SECURITY CUT FOR SECOND YEAR, AS THE LA RAZA DEMS TRY TO ADD ILLEGALS TO THE SYSTEM!

JOBS PLAN IS CALLED… AMNESTY!

HOW HE PUNKED US!

*

Oct 12, 2010

Wall St to give record payout

The payout, covering bonuses, premiums and stock options for the firm's executives and employees, is a four-per cent raise over the previous record $139 billion that was handed over in 2009. -- PHOTO: REUTERS

WASHINGTON - FINANCIAL institutions on Wall Street are preparing to pay a record US$144 billion (S$189 billion) in compensation and benefits, according to a study published on Tuesday in the Wall Street Journal.

The payout, covering bonuses, premiums and stock options for the firm's executives and employees, is a four-per cent raise over the previous record $139 billion that was handed over in 2009, said the financial daily.

The study, which covers 35 Wall Street firms - including banks, investment banks, hedge funds and money managing groups - found that 29 of the institutions were also expected to see revenue rise by three per cent, from $433 billion to $448 billion.

The 2010 profit for the firms of some $61 billion is still a 20 per cent decline on the $82 billion in 2006 - despite in that time compensation at the institutions soared 23 per cent, according to the Journal.

Wall Street banks and funds have already come under withering criticism for their actions during the 2008 financial crisis and faced the fury of the US public for paying out huge bonuses even though some were propped up by taxpayer funds to keep afloat.

In June US authorities announced guidelines aimed at countering pay and bonus practices blamed for the excessive risk taking that fueled the global financial crisis. -- AFP

*

The economic crisis was an 'inside job'

By Kathleen Parker

Wednesday, October 13, 2010; A19

If you haven't been humming tunes from "Les Misérables," you haven't seen "Inside Job," the new documentary about how our economic crisis evolved.

The most forgiving American will want to seize a pitchfork and march on Wall Street. Or Harvard Square. Or in front of the White House. There are so many despicable parties, it's hard to pick a favorite. Is it time to reconsider the Axis of Evil?

The film, written and directed by Charles Ferguson (and narrated by Matt Damon), will be opening in select cities this week. Although much of the story is familiar, Ferguson manages to weave together decades of bits and pieces into a dramatic narrative that plays like a whodunit. Names have faces, and storytelling combined with graphic illustrations helps explain the complex series of events that led to the global meltdown. Here are a few takeaways:

One, trying to assign blame to either Democrats or Republicans is pointless. Everyone is culpable. From the early 1980s, when Ronald Reagan deregulated banks, through the two Bushes, Bill Clinton and now Barack Obama, each administration has endorsed -- and each Congress has helped tweak -- laws and rules that made systemic abuses and the meltdown not only possible but, looking back, inevitable.

Two, many investment bankers knew the mortgage loans they were packaging and selling were junk. They knew because their own analysts told them so. Tens of thousands of loans failed to meet basic underwriting standards, according to recent testimony before the Financial Crisis Inquiry Commission, a bipartisan group created to examine the causes of the meltdown. Not only that, Wall Street insiders were betting against their own customers and institutions.

Throughout the system, from the lending institutions to federal regulators to congressional overseers, those charged with protecting consumers averted their eyes.

Three, the cozy relationship between Wall Street and Ivy League academia, wherein economists push policies that benefit them financially, is eye-opening. In some cases, business professors and economists at America's top schools were shown to have conflicts of interest as they advanced policies for which they had been paid directly or that otherwise benefited them.

In other instances, we see that the same people who created policies that ultimately led to these abuses are still -- or were until recently -- running the show. Notably missing from the film, declining to be interviewed, are Larry Summers, Tim Geithner, Hank Paulson, Alan Greenspan and Robert Rubin.

This is not to say that what benefits Wall Street necessarily hurts average Americans or that all bankers are corrupt, but the system clearly enabled the abuses that have led to current circumstances. The attitude seemed to be that everyone was doing it.

When the big banks failed, of course, taxpayers were left holding the bag. Even though there was wide consensus that the bailouts were necessary to get credit moving again, there is simply no justification for the bonuses and golden parachutes that went to the very people who drove their institutions -- and us -- off a cliff. Reward for failure was the best gig in town.

Although most of what the movie highlights is familiar, there's something jarring about seeing the culprits up close in all their taxpayer-subsidized, suntanned splendor -- their multiple estates and private jets juxtaposed against shuttered homes and unemployed Americans living in tents. Obscene is the word that comes to mind.

I'm not one to advance class warfare, and most Americans still want to preserve a market system that leaves open the possibility that they, too, can work hard and achieve wealth. But it's clear from "Inside Job" that the game has been rigged so that only a few were in positions to get rich at the expense of the middle class, not just here but globally.

The movie isn't perfect. One wonders what was left on the editing floor. Some of those interviewed, who dodged questions or gave unacceptable answers, also looked stupid. None of these guys is stupid.

And, at the end, Ferguson couldn't resist making an editorial comment as the camera panned the Statue of Liberty. "Some things are worth fighting for."

We get it. The film is so well done and presented so factually that no Hollywood prodding was needed. Anyone who sees this movie will be furious. Thus, the only remaining question is why some of these people aren't being prosecuted for fraud or at least shirking fiduciary duty.

It would seem as never before that the White House should hire a special prosecutor. Ferguson's movie, which the president and his economic team had best watch -- and soon -- could use a sequel: "The Perp Walk."

*

“Wells Fargo, for instance, which has leeched $25 billion in bailout money, bought an inadvertently hilarious full-page ad in The Times to whine about the junkets to Las Vegas and elsewhere it was forced to cancel because of public outrage.” --- Maureen Dowd, NYTimes

*

US banks and corporations announce huge pay packages for 2009

Wells Fargo executives double their compensation

By Andre Damon

11 March 2010

US corporations are beginning to release figures on CEO pay for last year. Multi-million dollar packages are the norm in a year that saw the continued deterioration in the living conditions of the vast majority of the population.

Each of the top five executives at Wells Fargo at least doubled their compensation last year over 2008. The five men each received over $11 million in 2009, while Wells Fargo’s chief executive, John Stumpf, took home $21.3 million, far higher than his 2008 package of $8.8 million.

Mark Oman, the head of consumer business for Wells Fargo, nearly quadrupled his previous pay package to $13.5 million. Howard Atkins, the chief financial officer, received $11.6 million. The other Wells Fargo executives who received huge payouts were David Carroll, the head of the brokerage unit ($14.3 million), and David Hoyt, the head of wholesale banking ($13.5 million).

These latest reports come in the wake of Barack Obama’s statement last month that he does not “begrudge” the bonuses of Goldman Sachs CEO Lloyd Blankfein and JPMorgan Chase CEO Jamie Dimon. Blankfein got a $9 million bonus lat year, while Dimon received $16 million. (Their total packages have not yet been released).

“I’M NOT HERE TO PUNISH MY BANKSTER DONORS THAT DESTROYED THE LIFE SAVINGS OF MOST OF THIS NATION. I’M HERE TO SERVICE THEM FOR ANY AND ALL THEY WANT!” Barack Obama, the Bankster President (La Raza Party).

Obama defended the bonuses on the grounds that Blankfein and Dimon are “savvy businessmen.” This statement gave what amounted to official carte blanche for the multi-million-dollar bonuses paid to hundreds of other “savvy businessmen,” even as the government oversees a massive attack on the living conditions of the vast majority of the population.

The Reyes family has become a case study of the unrelenting violence. Surviving kin angrily blame government officials for failing to protect a family 'so historically aggrieved.'

By Tracy Wilkinson, Los Angeles Times

February 26, 2011

Reporting from Mexico City

Advertisement

First they killed activist Josefina Reyes. Then her brother. Then they burned her mother's house. Two and a half weeks ago, gunmen dressed in black kidnapped Reyes' sister, sister-in-law and another brother.

On Friday, their bodies were discovered, shot and dumped on the side of a windswept road in Chihuahua state.

The Reyes family has become a case study of the unrelenting violence ravaging northern Mexico.

Surviving relatives Friday angrily blamed government authorities for failing to protect a family "so historically aggrieved."

"This is part of a growing wave of systematic harassment of the Reyes family by the state" and by criminal forces, the family said in a statement.

Carlos Gonzalez, spokesman for the Chihuahua state attorney general's office, said the bodies of Maria Magdalena Reyes, 45; Elias Reyes, 56; and his wife, Luisa Ornelas, 54; were discovered with handwritten signs suggesting that they had worked for drug traffickers — an allegation the family vehemently denied.

Other members of the Reyes family said they have been targeted because they are resisting a campaign by "outsiders" — presumably drug traffickers — to drive them and other families from their homes in the Juarez Valley around the town of Guadalupe, south of Ciudad Juarez. The region is coveted by organizations smuggling drugs into the United States, and Juarez has become Mexico's deadliest city as rival drug gangs battle for control despite a stepped-up presence of federal police and army forces.

"There are powerful interests that want to silence the Reyes family," Josefina's sister, Marisela, 39, said in an interview this week. She had come to Mexico City and erected a protest tent in front of the Senate to draw attention to her relatives' disappearance.

As is so often the case in Mexico, the story of the Reyes family's suffering is complex and not written in black and white.

Josefina Reyes became an activist after the 2008 kidnapping and slaying of her son. She openly blamed the army occupying parts of the Juarez Valley for her son's death. There were persistent reports at the time that he worked for one of the drug cartels disputing territory around Ciudad Juarez.

Reyes campaigned vociferously against alleged human rights abuse by the military. In January of 2010, an armed commando shot her in the head, making her one of an estimated seven human rights activists slain in Mexico in three years. There have been no arrests in the case, and Gonzalez, of the state attorney general's office, acknowledged again Friday that investigators had no leads.

Seven months after Josefina was killed, her brother, Ruben, was also shot to death.

On Feb. 7 of this year, about half a dozen gunmen pulled Elias and Maria Magdalena Reyes and Ornelas from their truck about 15 miles outside Ciudad Juarez in the early afternoon, according to witnesses.

Josefina Reyes' mother, Sara Salazar, was staging a protest outside government offices in Juarez on Feb. 15 when an armed group torched her house.

Under pressure from the family, authorities this week used dogs and search teams to look for the missing relatives. In the end, however, a passerby spotted the bodies and informed authorities.

Jorge Gonzalez Nicolas, a state prosecutor, said in a news conference that it appeared the victims had been dead for "several days" and that dirt on the bodies indicated they had probably been buried and then disinterred to be dumped by the road.

"It is important to make clear that they were apparently arranged there on the road moments before being spotted … possibly to lower the pressure" from a widening search, he said.

Gustavo de la Rosa, a veteran human rights activist who has been working as an intermediary between authorities and the family, echoed Amnesty International and other organizations in condemning the killings and demanding protection for the remaining Reyes family members.

"This is an aggression against defenders of human rights, because that is what this family was involved in," De la Rosa said.

He called on the army deployment in charge of the area to provide a full accounting of criminal activities in the Juarez Valley. "There are military forces that have been there six, seven months, and they must know something," he said.

BUSH WAR PROFITEER, DIANNE FEINSTEIN, AN OPEN BORDERS, NO E-VERIFY, AMNESTY, OR AT LEAST CONTINUED NON-ENFORCEMENT OF LAWS PROHIBITING THE HIRING OF ILLEGALS, HAS LONG BEEN OWNED BY WELLS FARGO and BANK of AMERICA. FEINSTEIN IS A MAJOR DONOR TO ONE OF THE MOST CORRUPT PRESIDENTS IN HISTORY, BARACK OBAMA.

BOTH CRIMINAL BANKSTERS WELLS FARGO and BANK of AMERICA ARE GENEROUS DONORS TO THE MEX FASCIST PARTY of LA RAZA, AND ROUTINELY ILLEGALLY OPEN BANK ACCOUNTS FOR ILLEGALS.

WELLS FARGO IS BANKSTERS TO THE MEX DRUG CARTELS.

*

“Wells Fargo, for instance, which has leeched $25 billion in bailout money, bought an inadvertently hilarious full-page ad in The Times to whine about the junkets to Las Vegas and elsewhere it was forced to cancel because of public outrage.” --- Maureen Dowd, NTimes

*

Lou Dobbs Tonight

Monday, November 12, 2007

Mortgage giants Wells Fargo and Bank of America are accused of slapping dubious fees on homeowners struggling to save their homes. With fewer new mortgages being written, these

companies appear to be leaning on these lucrative fees to stay profitable—with devastating consequences for homeowners. We’ll have that report.

*

HOW MUCH OF THIS NATION’S MELTDOWN IS DUE TO BANKSTER CRIME?

AND THEY’RE STILL BUYING POLITICIANS, AND STILL RAKING IN MASSIVE PROFITS ON TOP OF THE NO-STRINGS WELFARE BAILOUTS THEY USED TO BUY OTHER BANKSTERS.

BOTH BANKSTERS WELLS FARGO and BANK of AMERICA ARE GENEROUS DONORS TO LA RAZA, THE MEXICAN FASCIST PARTY of AMERICA!

BOTH BANKS ILLEGALLY OPEN BANK ACCOUNTS FOR ILLEGALS.

BOTH BANKS HANDED OUT THEIR HIGHLY PROFITABLE MORTGAGE SCAMS TO ILLEGALS ILLEGALLY AND THEN DUMPED THAT PRODUCT ON UNSUSPECTING INVESTORS.

BOTH BANKS HAVE CAUSED MASSIVE FORECLOSURES AND THE PROFITED FROM THESE FORECLOSURES ON THE OTHER END.

BOTH BANKS OWN SEN. DIANNE FEINSTEIN, ONE THE MOST CORRUPT AND SELF-SERVING POLITICIANS IN AMERICAN HISTORY. SHE FRONTED FRO THEIR BANKSTER WRITTEN “BANKRUPTCY REFORM”, VOTED ON WITH BOXER, BIDEN, AND CLINTON. WHERE THERE’S A PO, THERE’S A BANKSTER BOUGHT HO!

WELLS FARGO IS THE BIGGEST BACKER OF PAY DAY LOAN SHARKS, WHICH PARTICULARLY VICTIMIZE ILLEGALS AND BLACK AMERICA!

IF YOU’VE BEEN IN SILICON VALLEY, YOU WON’T FIND AN AMERICAN BORN EMPLOYEE AT WELLS FARGO OR BANK of AMERICA. THEY’RE CHINESE AND INDIANS IMPORTED IN TO TAKE OUR JOBS!

THESE ARE MONSTER CRIMINAL ORGANIZATIONS! THE FACT THAT THEY’RE SERVICING NARCOMEX IS HARDLY SURPRISING!

United States banks' key role in Mexico's drug gangs and dirty money

By Michael Smith

Bloomberg News

Just before sunset on April 10, 2006, a DC-9 jet landed at Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, Mexican prosecutors later found. Law-enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia and Bank of America. This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo, which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers. The admission came in an agreement that Wachovia struck with federal prosecutors in March, and it sheds light on the role of U.S. banks in contributing to Mexico's violent drug trade.

Wachovia admitted it didn't do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That's the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history â€” a sum equal to one-third of Mexico's current gross domestic product.

"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," says Jeffrey Sloman, the federal prosecutor who handled the case.

Since 2006, more than 22,000 people have been killed in drug-related battles. Among the dead are police, soldiers, journalists and ordinary citizens. The U.S. has pledged Mexico $1.1 billion in the past two years to aid in the fight against narcotics cartels.

Behind the carnage in Mexico is an industry that supplies hundreds of tons of cocaine, heroin, marijuana and methamphetamines to Americans. The cartels have built a network of dealers in 231 U.S. cities from coast to coast, taking in about $39 billion in sales annually, according to the Justice Department.

Twenty million people in the U.S. regularly use illegal drugs, spurring street crime and wrecking families. Narcotics cost the U.S. economy $215 billion a year â€” in overburdened courts, prisons and hospitals and lost productivity, the department says.

"It's the banks laundering money for the cartels that finances the tragedy," says Martin Woods, director of Wachovia's anti-money-laundering unit in London from 2006 to 2009. Woods says he quit the bank in disgust after executives ignored his documentation that drug dealers were funneling money through Wachovia's branch network.

"If you don't see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you're missing the point," Woods says.

Cleansing dirty cash

Wachovia is just one of the U.S. and European banks that have been used for drug- money laundering. For the past two decades, Latin American drug traffickers have gone to U.S. banks to cleanse their dirty cash, says Paul Campo, head of the financial-crimes unit of the U.S. Drug Enforcement Administration (DEA).

American Express Bank paid fines in 1994 and 2007 after admitting it had failed to spot and report drug dealers laundering money through its accounts. Drug traffickers used accounts at Bank of America in Oklahoma City to buy three planes that carried 10 tons of cocaine, according to Mexican court filings.

Federal agents caught people who work for Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009. Mexican drug dealers used shell companies to open accounts at London-based HSBC Holdings, an investigation by the Mexican Finance Ministry found.

Those two banks weren't accused of wrongdoing. Bank of America spokeswoman Shirley Norton and HSBC spokesman Roy Caple say laws bar them from discussing specific clients. They say their banks strictly follow the government rules.

A Mexican judge on Jan. 22 accused the owners of six money changers in CuliacÃ¡n and Tijuana of laundering drug funds through their accounts at the Mexican units of Banco Santander, Citigroup and HSBC, according to court documents. The money changers are in jail while being tried. Citigroup, HSBC and Santander weren't accused of any wrongdoing. The three banks say Mexican law bars them from commenting on the case, adding that they each carefully enforce anti-money-laundering programs.

On June 15, the Mexican Finance Ministry announced it would set limits for banks on cash deposits in dollars.

Mexico's drug cartels have become multinational criminal enterprises.

Some of the gangs have delved into other illegal activities such as gunrunning, kidnapping and smuggling people across the border, as well as into seemingly legitimate areas such as trucking, travel services and air-cargo transport, according to the Justice Department's National Drug Intelligence Center.

These criminal empires have no choice but to use the global banking system to finance their businesses, Mexican Senator Felipe Gonzalez says.

"With so much cash, the only way to move this money is through the banks," says Gonzalez, who carries a .38 revolver for personal protection. "I know this won't stop the narcos when they come through that door with machine guns," he says, pointing to the entrance to his office. "But at least I'll take one with me."

No bank has been more closely connected with Mexican money laundering than Wachovia.

After a 22-month investigation, the Justice Department on March 12 charged Wachovia, now owned by Wells Fargo, with violating the Bank Secrecy Act by failing to run an effective anti-money-laundering program.

Five days later, Wells Fargo promised in a Miami federal courtroom to revamp its detection systems. Wachovia's new owner paid $160 million in fines and penalties, less than 2 percent of its $12.3 billion profit in 2009.

Bank's regrets

If Wells Fargo keeps its pledge, the U.S. government will, according to the agreement, drop all charges against the bank in March 2011.

Wells Fargo regrets that some of Wachovia's former anti-money-laundering efforts fell short, spokeswoman Mary Eshet says. Wells Fargo has invested $42 million in the past three years to improve its anti-money-laundering program and has been working with regulators, she says.

"We have substantially increased the caliber and number of staff in our international investigations group, and we also significantly upgraded the monitoring software," Eshet says. The agreement bars the bank from contesting or contradicting the facts in its admission.

The bank declined to answer specific questions, including how much it made by handling $378.4 billion, including $4 billion of cash from Mexican exchange companies.

The Smurfs

Drug money moves back and forth across the border in an endless cycle. In the U.S., couriers take the cash from drug sales to Mexico â€” as much as $29 billion a year, according to U.S. Immigration and Customs Enforcement. They hide it in cars and trucks to smuggle into Mexico. There, cartels pay people to deposit some of the cash into Mexican banks and branches of international banks. The narcos launder much of what's left through money changers.

By law, the money changers have to demand identification from anyone exchanging more than $500. They also have to report transactions higher than $5,000 to regulators.

The cartels get around these requirements by employing legions of individuals, including relatives, maids and gardeners, to convert small amounts of dollars into pesos or to make deposits in local banks. After that, cartels wire the money to a multinational bank.

The people making the small money exchanges are known as Smurfs, after the cartoon characters.

"They can use an army of people like Smurfs and go through $1 million before lunchtime," says Jerry Robinette, who oversees U.S. Immigration and Customs Enforcement operations along the border in east Texas.

The U.S. Treasury has been warning banks about big Mexican-currency-exchange firms laundering drug money since 1996. By 2004, many U.S. banks had closed their accounts with these companies. Wachovia ignored warnings by regulators and police, according to the deferred-prosecution agreement.

One customer that Wachovia took on in 2004 was Casa de Cambio Puebla, a Puebla, Mexico-based currency-exchange company. Pedro Alatorre, who ran a Puebla branch in Mexico City, had created front companies for cartels, according to a pending Mexican criminal case against him.

A federal grand jury in Miami indicted Puebla, Alatorre and three other executives in February 2008 for drug trafficking and money laundering. In May 2008, the Justice Department sought extradition of the suspects, saying they used shell firms to launder $720 million through U.S. banks.

Puebla executives used the stolen identities of 74 people to launder money through Wachovia accounts, Mexican prosecutors say in court-filed reports.

"Wachovia handled all the transfers, and they never reported any as suspicious," says Jose Luis Marmolejo, a former head of the Mexican attorney general's financial crimes unit now in private practice.

It was the Puebla investigation that led U.S. authorities to the broader probe of Wachovia. On May 16, 2007, DEA agents conducted a raid of Wachovia's international banking offices in Miami. They had a court order to seize Puebla's accounts.

U.S. prosecutors and investigators then scrutinized the bank's dealings with Mexican-currency-exchange firms. That led to the March deferred-prosecution agreement.

With Puebla's Wachovia accounts seized, Alatorre and his partners shifted their laundering scheme to HSBC, according to financial documents cited in the Mexican criminal case against Alatorre.

In the three weeks after the DEA raided Wachovia, two of Alatorre's front companies, Grupo ETPB and Grupo Rahero, made 12 cash deposits totaling $1 million at an HSBC Mexican branch, Mexican investigators found.

The funds financed a Beechcraft King Air 200 plane that police seized on Dec. 29, 2007, in Cuernavaca, 50 miles south of Mexico City, according to information in the case against Alatorre.

Laundering money

For years, federal authorities watched as the wife and daughter of Oscar Oropeza, a drug smuggler working for the Matamoros-based Gulf Cartel, deposited stashes of $20 bills several times a day at a Bank of America branch in Brownsville, Texas, less than 3 miles from the border.

Bank employees got to know the Oropezas by the smell of their money.

"I asked the tellers what they were talking about, and they said the money had this sweet smell like Bounce, those sheets you throw into the dryer," says Tom Salazar, an agent who investigated the family. "They told me that when they opened the vault, the smell of Bounce just poured out."

Oropeza, 48, was arrested May 31, 2007, by police in Saraland, Ala., who stopped him on a traffic violation. Checking his record, they learned of the investigation in Texas.

They searched the van and discovered 185 pounds of cocaine hidden under a false floor. That allowed federal agents to freeze Oropeza's bank accounts and search his marble-floored home in Brownsville, Robinette says.

Inside, investigators found a supply of Bounce alongside the clothes dryer.

All three Oropezas pleaded guilty in U.S. District Court in Brownsville to drug and money-laundering charges in March and April 2008. Oscar Oropeza was sentenced to 15 years in prison; his wife was ordered to serve 10 months and his daughter got 6 months.

Bank of America's Norton says, "We not only fulfilled our regulatory obligation, but we proactively worked with law enforcement on these matters."

Banks aren't the only financial institutions that have turned a blind eye to drug cartels in moving illicit funds. Western Union, the world's largest money transfer firm, agreed to pay $94 million in February 2010 to settle civil and criminal investigations by the Arizona attorney general's office.

"Their allegiance was to the smugglers," Holmes says. "What they thought about during work was 'How may I please my highest-spending customers the most?' "

Workers in more than 20 Western Union offices allowed the customers to use multiple names, pass fictitious identifications and smudge their fingerprints on documents, investigators say in court records.

"In all the time we did undercover operations, we never once had a bribe turned down," says Holmes, citing court affidavits.

Western Union has made significant improvements, it complies with anti-money-laundering laws and works closely with regulators and police, spokesman Tom Fitzgerald says.

Wire transfers keep crime cartels and human smugglers in the money, officials say. Arizona's attorney general wants Western Union to cooperate more fully with investigations.

By Josh Meyer

June 8, 2009

Reporting from Phoenix — The bleeding body of Mexican immigrant Javier Resendiz Martinez was the first thing police noticed when they raided the bungalow on North 63rd Avenue here four years ago after reports of gunshots.

Soon afterward, however, they found payment logs of more than 100 wire transfers to Western Unions in the border town of Caborca, Mexico -- which state and federal officials cite as evidence that the financial services company and other money transmittersare used by Mexican crime syndicates to help facilitate the smuggling of people into the United States.

Arizona Atty. Gen. Terry Goddard said human smuggling has become a $2-billion-a-year business in his state alone, thanks in large part to what he calls "blood wires," the payments from family members, friends and employers to smugglers via Western Union and other companies.

Goddard and other Arizona officials have not accused Western Union of a crime. But in interviews and court documents they say the company consistently has rejected requests for cooperation, undermining efforts in Arizona to go after the crime cartels that control much of the increasingly violent trade in humans, drugs, weapons and laundered cash from their havens in Mexico.

The Colorado-based company works cooperatively with law enforcement agencies around the world to identify and prosecute illegal activity, said Peter Ziverts, its vice president for anti-money laundering. He said Western Union had instituted numerous reforms to detect illegal wire transfers, including far more aggressive oversight of its thousands of independent money-store operators.

Near the U.S. border, he said, the company caps the total amount that someone can transfer, but keeps the cap and the time frame secret to avoid tipping off smugglers. The company has filed more than 30,000 suspicious activity reports from Arizona, Texas and Mexico in the last year, he said.

"We cooperate . . . and we go over and above what we're required to do," Ziverts said.

Marcy M. Forman, who heads the investigative arm of the Department of Homeland Security's Immigration and Customs Enforcement division, said Western Union had cooperated on specific criminal investigations. "When we need information, we generally don't have a problem getting it," Forman said. "But ours is case specific. So that may be the difference."

Homeland Security Secretary Janet Napolitano, until recently Arizona's governor and its attorney general before Goddard, had no comment on Goddard's ongoing battles with Western Union.

"The general strategy of targeting drug cartels and [drug and human] smugglers by breaking their financial backbone was an approach Napolitano originated as state [attorney general] and has proved immensely successful at the state level," said a senior Homeland Security official, who spoke on condition of anonymity when discussing department thinking.

Goddard said that since he took office in 2003, Western Union had denied many of his formal demands for information on money transfers and refused to comply with warrants ordering the seizure of large volumes of suspicious payments -- especially those to Caborca and other smuggler strongholds in Mexico's Sonora state, just south of Arizona.

Western Union has argued in court that many of Goddard's demands are unconstitutionally broad and violate the privacy of its customers, many of whom are immigrants sending money home to Mexico. Some customers won't want to use Western Union if their money could be seized, it says, although it acknowledges that no transfers have been seized in Arizona in several years. The company also opposes the state's efforts to get access to the wire transfer data, calling that unconstitutional.

Some judges have agreed.

Last week, the Arizona Supreme Court ruled that Goddard had overstepped his authority in trying to seize records of wire transfers exceeding $500 from 29 other U.S. states to Sonora.

Western Union hailed the ruling. But Goddard, a likely candidate for governor, said the decision was narrowly focused and still would allow him to seize some of the payments if they were linked to human smuggling into those other states via Arizona.

He likens his request for the data to getting approval for a wiretap: The information helps authorities find suspicious patterns of activity, which they can use for further investigation and possible prosecution.

Goddard said that he was focusing on money transfers because, without them, the human smugglers would be out of business.

According to law enforcement officials, Mexican smugglers almost always do business in cash. But migrants pay most of the $2,000 or so fee when the trip is completed.

To ensure they get paid, smugglers hold their human cargo -- usually half dressed and under armed guard -- in a vast network of "stash houses" until the transfers come through. Then they whisk the migrants by van to their destinations around the nation.

Authorities say there are about 300 stash houses around Phoenix at any given time, each filled with dozens of immigrants. Hundreds more hideaways are scattered throughout the Southwest and in dozens of "corridor" states where the migrants end up.

After they reach the United States, many migrants are forced to pay two or three times the negotiated fee -- and may be assaulted, raped or killed if they object.

When Resendiz protested at the house on 63rd Avenue, he was given a phone and told to call his brother in Philadelphia. Officials said that, as his brother listened in, Resendiz, 36, argued with his captors and was executed.

Authorities contend that tracing the flurry of electronic payments that Western Union, MoneyGram and other firms process is vital to finding the smugglers and their stash houses.

Between 1999 to 2001, according to a sworn declaration from Daniel Kelly of the Arizona Financial Crimes Task Force, one group of smugglers laundered more than $10 million through Western Union.

Since 2003, the U.S. Treasury Department and Arizona have fined Western Union $6 million for willful failure to file suspicious activity reports and other violations. Authorities call that a significant disciplinary action.

"Our system wasn't nearly as robust as it is now," Ziverts said recently.

By 2005, Arizona officials said, their money seizures and enforcement efforts had reduced the flow of smuggling proceeds into the state by $600 million a year. The smugglers began having the money wired from other states directly to associates in Mexico.

That year, Western Union complied with an Arizona state subpoena to provide data for two months of wire transfers to Sonora.

Authorities found that in that short window, three suspected smugglers linked to the stash house where Resendiz was killed had picked up 161 wire transfers at a single Western Union in Caborca.

Only one of those payments had originated from Arizona, Kelly said -- further proof that state authorities needed broader seizure powers.

In all, $28 million flowed during that short period from other states into Western Unions in Caborca and other Sonora smuggling hubs.

So Goddard obtained a warrant to seize those suspicious payments too. Western Union refused to comply, and the impasse took three years to work its way through state courts.

Goddard and other state officials say the firm has not done enough to monitor questionable payments, institute safeguards, discipline incompetent and unscrupulous employees.

"Western Union has made every effort to prevent data disclosure and identification of criminal activity which we could be able to make from that disclosure," he said during a March Senate hearing.

Western Union disagrees. The company recently agreed to provide some of the data from other states.

But Goddard -- who has pressed for tougher federal laws and regulations to crack down on the smugglers -- said the firm had not done enough.

No other states, he said, systematically analyze and target suspected smugglers' wire transfers for prosecution, and neither does the U.S. or Mexican government. As a result, Arizona authorities said, their hunt for the smugglers will remain largely futile.

Subsidiaries of Wells Fargo and HSBC are accused of steering blacks into higher-price loans even if they qualified for better terms.

By E. Scott Reckard

March 14, 2009

The NAACP sued subsidiaries of two major banks Friday for allegedly steering African American borrowers unfairly into costly subprime mortgages.

The suits -- against Wells Fargo Bank and Wells Fargo Home Mortgage Inc., owned by Wells Fargo & Co., and against HSBC Mortgage Corp. (USA) and HSBC Bank USA, owned by HSBC Holdings -- arrive at a time when the housing crisis and soaring unemployment already are causing disproportionate harm in black neighborhoods, leaders of the rights group said.

The lawsuits, filed in U.S. District Court in Los Angeles, add to a long list of lenders that the National Assn. for the Advancement of Colored People has accused of "systematic, institutionalized racism" in litigation that began in 2007.